Fugitives from the growing violence in northeast Myanmar described on Tuesday how they fled airstrikes and gun battles between the army and ethnic rebels, as the country's president vowed "not to lose an inch" of territory.

The clashes between the army and Kokang rebels in Shan state have uprooted tens of thousands in the past week, with Beijing saying it has stepped up border controls after some 30,000 fled into its Yunnan province.

A monastery in the Shan town of Lashio, some 140 kilometres (85 miles) south of the conflict zone, has become a temporary shelter for thousands who have fled the violence, most with little more than a few plastic bags of belongings.

Many are temporary workers who have returned to their homes in other parts of Myanmar.

But at least 200 people are seeking refuge in the monastery's cramped dormitory after fleeing intense fighting around the Kokang settlement of Laukkai, a now near-deserted border town and the epicentre of the fighting.

"We constantly heard the noise of firing -- both from guns and big weapons. It was so loud. Sometimes I thought the bullets were flying by my head," Win Thaung Tun told AFP.

The 28-year-old Mandalay construction worker said he had lived in Laukkai for five years, attracted by the higher wages paid in Chinese currency, before fleeing the town on Friday.

Clashes between the ethnically Chinese Kokang and soldiers erupted on February 9, shattering six years of relative calm in the region.

The military has launched a counter-offensive against rebels who tried to capture Laukkai in a series of brazen assaults that left nearly 50 soldiers dead.

Dozens have now been killed on both sides in raging street battles as the military moved to retake the town and flush out rebel holdouts, although ascertaining exact casualty figures is difficult.

"We saw two helicopters and airplanes shooting... the situation got worse every day," Thein Htike Soe, 33, who fled with his wife from their home near Laukkai to Lashio, told AFP.

"We don't know where to go or what to do," he said.

- 'Don't give an inch' -

It is unclear what sparked the resurgence of conflict with Kokang rebels, which has undercut government efforts to agree a nationwide ceasefire with the country's patchwork of ethnic armed groups.

Myanmar's President Thein Sein said the military was "protecting sovereignty", the Global New Light of Myanmar reported on Tuesday, adding that the former junta general "vowed not to lose an inch of Myanmar's territory" during a visit to wounded soldiers in hospital.

Officials have blamed the Kokang rebel leader Phone Kya Shin for stoking the violence, and called on Beijing to rein in any local officials who might be helping the group on its side of the border.

Beijing on Tuesday said it was providing relief to the more than 30,000 people who have already fled into Yunnan province, and was also stepping up "patrolling and management of the border area".

Chinese foreign ministry spokeswoman Hua Chunying called on conflicting parties in Myanmar to "prevent the situation from escalating".

"In particular they should avoid affecting the security of the Chinese side of the border," Hua told a briefing in Beijing.

The Kokang region -- known for its opium production -- had been relatively calm since 2009, when a huge assault by Myanmar's army against the Kokang rebels saw tens of thousands of people flood over the border into China.

The latest fighting has drawn in rebels from other nearby armed groups including the Ta'ang National Liberation Army and the powerful Kachin Independence Army, which are both battling government forces in other areas of Shan and in nearby Kachin state.

But the perception that the Kokang are Chinese means that they are seen as "outliers" by most of Myanmar's armed ethnic minority groups, said Nicholas Farrelly of Australian National University.

"Kokang is different because of its reputation for drug production, the Chinese ethnicity of its leaders, and their recent history of fighting back. All of those factors come into play any time bullets start flying up there," he told AFP.

Myanmar, which has over 130 recognised ethnic minorities, has been plagued with sporadic conflicts in its border regions since independence in 1948, in what became the world's longest civil war.